Oklahoma Supreme Court Hears Arguments on Cannabis Business Fee Increase

LOS ANGELES— The Oklahoma Supreme Court recently heard arguments in a lawsuit filed by a coalition of cannabis companies challenging a large business fee increase that took effect in June. The companies argue that the fee increase, authorized by House Bill 2179 and approved by the Oklahoma Legislature last year, is equivalent to a tax hike and therefore illegal. The cannabis industry has been opposing the measure for months.

Jed Green, the director of the trade group Oklahomans for Responsible Cannabis Action, expressed concern that the fee hike would empower illicit operators while burdening compliant businesses. Dispensaries, for instance, could see their fees rise from $2,500 to $10,000 annually, and processors could face an increase of up to $30,000.

Green estimated that the lawsuit could save the industry $75 million to $125 million in permit fees if the Supreme Court rules in their favor.

The Oklahoma Medical Cannabis Authority countered in court filings that the fee increases will be used to regulate and oversee the growing cannabis industry. The state argued that the higher fees are necessary to address the oversupply of cannabis in the state, which has presented opportunities for organized crime and made it difficult for regulators to keep up.

The new law implements an annual tiered licensing program with fees ranging from the current $2,500 to over $50,000.

William Flanagan, assistant solicitor general for Attorney General Gentner Drummond, urged the court not to take the case, asserting that the bill serves a regulatory purpose and that the fees will enhance public safety and reduce the cannabis supply in the state.

Stephen L. Cale, an attorney representing the plaintiffs, argued that the matter is of constitutional and public concern, making it essential for the state Supreme Court to hear the case due to its statewide impact. A ruling from the court is pending, and the outcome could have significant implications for Oklahoma’s burgeoning medical cannabis industry.